"It is important that we continue to invest to ensure that these keep on meeting the needs of customers, the environment and economic development.

"I recognise that households and businesses are under financial pressure.

"That is why I expect Scottish Water to continue to deliver this £3.5bn investment programme without the need for inflation-busting charge increases.

"This government is determined to ensure that Scottish Water continues to be a public sector success story."

In its policy statement, the Scottish government also stated water charges must remain stable and not increase by more than the rate of inflation.

An exemption scheme will be extended to more of the charitable sector to help pay for their water and sewerage services.

"I am delighted that we are announcing the start of this major investment programme for 2015-21 which will enable Scottish Water to continue to provide first-class customer service, while supporting the Scottish economy and creating jobs in the construction industry," said Douglas Millican, the chief executive of Scottish Water.

"We look forward to working closely with our customers and communities to further improve drinking water quality and the environment the length and breadth of Scotland."

The news comes after the Office for National Statistics said Scotland's unemployment rate fell to 6% in the three months to July – below the UK's 6.2% rate.